March 13, 2008 -- Christy Mylar Smith and her husband paid their Citibank card bill on time for years -- but when they paid late twice in one year, their interest rate increased from 12.9 percent to 31.4 percent overnight.
Steven Strachan has a FICO score in the high 700s, has always paid on time, has never gone over the limit, yet Chase increased his rate from 10.99 percent to 24.99 percent.
Steve Autry accepted a fixed rate for life of 9.9 percent from Capital One. Now Capital One tells him that the cost of business and rising interest rates will cause his rates to increase, even though he has been a customer in good standing for many years.
Marvin Weatherspoon took advantage of a low introductory rate from Bank of America, but because he was a few days late in paying one month, his interest rate has been increased from 4.25 percent to almost 25 percent. Only $108 of his $347 monthly payment goes to the principal. He has tried to work with the bank, but felt "he had no voice."
At the 11th hour, the credit companies found a way to stop those that had traveled to Washington today to tell their story to the congressional panel on consumer credit.
The banks whose practices were about to be discussed on Capitol Hill demanded that those testifying before Congress about credit card practices sign a waiver that allowed their personal financial information be revealed to the public.
The Republicans on the subcommittee backed the banks' requests and a procedural battle would have ensued.
All the panelists declined to sign the waiver.
Autry described the waiver "as broad and vague as their agreement is deceitful. It said basically, anywhere, anytime, any issue involving your credit is fair game in any public forum."
Rep. Carolyn Maloney, D-N.Y., chairwoman of the Subcommittee on Financial Institutions and Consumer Credit, announced the surprising change and why the expected panelists would not be appearing as scheduled.
"In order to have a discussion that focused entirely on the substance and not on process, we are doing everything we can to accommodate any concerns that have been raised."
The committee did hear testimony from Bank of America, JPMorgan Chase and Capital One representatives about their credit card practices.
Maloney and 82 other members of Congress are sponsoring the credit card holders bill of rights bill (HR5244), which, according to her, "aims to bring back some balance to the playing field," and, "put an end to any-time-any-reason repricing, stop issuers from raising rates on existing balances of card holders who make their payments on time."
Rep. Mark Udall, D-Colo., referred to the "muscle of the credit card industry," and said, "consumers weren't given a chance to tell their story," and, "regular people are getting the short end of the stick."
He added, "This is a form of intimidation. This is a quintessential 'David vs. Goliath' story, and you remember what happened in the end. David was successful."
While the five victims of the arbitrary credit card practices did not get their day in Congress, Udall introduced them to the press outside, where they summarized their experiences.
Strachan said, "I would very much have liked to have testified, especially when I got to listen to some of the dubious testimony that I did listen to," referring to the bank officials inside.
There is a planned House Subcommittee on Financial Services hearing April 9, where victims of arbitrary credit card practices might have a chance to testify about their experiences with the credit card companies.